Canada Tariffs Could Hit Drivers Hard—How To Cut Car Expenses With These Tips

Forbes

15 hours ago

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President Trump announced a slew of tariffs on imports last week, with a proposed 35% tariff on Canadian goods, including in the automotive sector, which could deeply affect American drivers.
Trump announced the tariffs on Truth Social with screenshots of a letter sent to Canada's prime minister, citing Canada's 'failure' to prevent America's fentanyl crisis and retaliation with its own tariffs as the reason for the imposition.
Canada is one of America's top two trading partners, alongside Mexico, and is part of the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) in 2020. According to the Office of the United States Trade Representative, Canada was America's largest partner for exports and the third-largest source for U.S. imports last year. Canada accounted for 12.5% of total U.S. trade—more than $57 billion— in May alone, according to the U.S. Census Bureau .
The U.S. relies on Canada to provide energy products and natural resources such as oil, natural gas and electricity, as well as vehicles and auto parts, industrial machinery and labor. Canada and Mexico also purchase over 20% of America's manufacturing output, which supports approximately 2 million American jobs and 43,000 businesses, according to the U.S. Trade Representative.
In a recent NPR interview, Ford CEO Jim Farley said it's 'inconceivable' to think that prices on cars won't go up as a result of tariffs.
Cullen Hendrix, a political scientist and senior fellow at the Peterson Institute for International Economics, notes that sectoral tariffs alone in the auto, steel and aluminum, and energy sectors had a 'striking' impact on Canada-U.S. trade flows, with Canadian exports to the U.S. down 14.5% from last year.
Regarding new tariffs collected, Hendrix says, 'Those are revenues that ultimately are going to be borne by either the U.S. consumers or the U.S. firms that are importing these goods in the form of smaller margins, essentially having to eat some of the cost of the tariffs.'
When it comes to the automobile industry, the tariffs could have a pronounced impact on virtually every sector of production and assembly.
'[It] affects all of the intermediate components, the wiring harnesses, the glass, the assembly housings, transmissions, that are being manufactured on one side of the border and then being moved across it,' Hendrix explains.
'Previously, that would have been done for free in order to be put in the next stage of the industrial process, in order to deliver a final good to the consumer. The effects of all of this at the end of the day are inflationary.'
Whether the tariffs will be implemented come August 1 is hotly contested. Since Trump announced his first tariff upon inauguration, he has flip-flopped on his plans dozens of times . Hendrix, noting that tariff deals take time to negotiate, cites his doubt that the deals will be properly set in motion in time.
'An actual trade deal usually takes years to negotiate, and these are incredibly complicated documents. Just download a copy of the USMCA, for instance, and you'll quickly realize that you're staring at a document that's significantly longer than the Bible,' he says.
'Because of that, I think the idea you would get 90 deals in 90 days was always a pipe dream.'
While experts hedge their bets on the deadline, U.S. automobile owners and drivers can still prepare for the worst and consider ways to cut back on costs. Tools like credit cards can help with day-to-day spending on gas and EV charging, especially alongside higher gas taxes recently rolled out in several states .
While petroleum prices may or may not skyrocket, the least you can do is capitalize on maxing out rewards for maximum spend. The best credit cards for gas of 2025 can help you save thousands at the pump and help offset any future inflationary costs.
Read more: Best Credit Cards for Gas of 2025 Annual fee: $0
Rewards: 5% cash back on up to $1,500 in combined purchases in categories that rotate quarterly (requires activation), 5% cash back on travel purchased through Chase Travel℠, 3% cash back on dining and drugstores and 1% cash back on all other purchases
Why we like it: The Chase Freedom Flex® * offers cash back on gas purchases during promotional quarters with rotating categories. When gas is an eligible category, drivers can earn 5% on up to $1,500 in gas. Plus, it comes with a $0 annual fee and 0% intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.99% to 28.49% applies. Balance transfer fee of up to 5% (min. $5) of the amount of each transfer applies. Blue Cash Preferred® Card from American Express Annual fee: $0 intro annual fee for the first year, then $95 (Terms apply, see rates & fees)
Rewards: 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) and 1% cash back on other eligible purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout
Why we like it: A generous 3% cash back on gas at U.S. gas stations is a no-brainer. With a $0 intro annual fee for the first year, then $95 annual fee, it's a strong contender for a go-to daily driver, with incentives on popular categories like select streaming services and U.S. supermarkets, perfect for families and everyday spending. Annual fee: $0
Rewards: 5% cash back on purchases in a top eligible spend category up to the first $500 spent each billing cycle, 4% cash back on hotels, car rentals, and attractions booked through Citi Travel and 1% cash back on all other purchases
Why we like it: If gas is your highest expense, this card can help you save 5% on gas purchases each billing cycle, up to $500 in purchases. Citi Strata Premier® Card Annual fee: $95
Rewards: 10 points per dollar spent on hotels, car rentals and attractions booked on CitiTravel.com, 3 points per dollar on restaurants, supermarkets, gas & EV stations, air travel and other hotel purchases and 1 point per dollar on all other purchases
Why we like it: Our top pick for the best credit cards for gas purchases , thanks to its flexible rewards. It's a solid gas card, but also a versatile jack-of-all-trades option for supermarkets, hotels, restaurants and air travel. Wells Fargo Autograph® Card (rates & fees) Annual fee: $0
Rewards: 3 points per dollar at restaurants, travel, gas stations, transit, popular streaming services and phone plans, 1 point per dollar on other purchases
Why we like it: For a card that charges a $0 annual fee, there's a solid earn rate across a number of popular categories, including at gas stations. Plus, there's an introductory APR that is great if you're looking to make a big purchase when getting the card.
To view rates and fees for Blue Cash Preferred® Card from American Express please visit this page.